The document contains a tutorial on budgeting with 30 multiple choice questions covering various budgeting concepts and calculations. The questions assess understanding of objectives of budgeting, characteristics that can create behavior problems, zero-based budgeting, components of budgets like sales, cash receipts, purchases, and operating budgets. Calculations include sales, expenses, cash collections and payments for various companies based on given budget information.

1. BKAL1013 Tutorial 8 A121 2012
1
Matric no: ______________ Group: _________ Attendance list no: _____________
Tutorial 8: BUDGETING; Due Date: 24-12-2012
1. The following are objectives of budgeting EXCEPT:
A. Establishing organizational goals
B. Periodically compare organizational actual achievement with their goals
C. Developing appropriate organizational information system
D. Executing strategy to achieve organizational goals
2. Which of the following budget characteristics can create human behavior problems?
A. Setting a specific goal
B. Setting goals which are too tight
C. Setting an achievable goal
D. Setting a measurable goal
3. Zero-based budgeting:
A. shows expected results of an organization for several activity levels
B. shows expected results of an organization for only one activity level
C. requires managers to prepare their budget as though its operations are being
started for the first time
D. shows organization’s yearly performance
4. _________________________ is used as the starting point to estimate the purchase
budget.
A. Selling and administrative budget
B. Cost of goods sold budget
C. Sales budget
D. Cash budget
5. The following items should be considered when preparing the cash budget EXCEPT:
A. Depreciation expense
B. Total cash receipts
C. Interest on financing
D. Cash payments to suppliers

2. BKAL1013 Tutorial 8 A121 2012
2
6. A master budget consists of two major parts that are:
A. Cash and Inventory budgets
B. Operating and Financial budgets
C. Purchase and Sales budgets
D. Inventory and Capital Expenditure budgets
7. Given is information on BoomBoom Enterprise’s budget:
Budgeted credit sales:
July August September
RM120,000 RM211,000 RM198,000
Based on their experience:
None of the budgeted sales will be collected in the month of the sales
60% will be collected the month after sales
36% in the second month and
4% will be uncollectible
The budgeted cash receipts from accounts receivable for September would be:
A. RM196,400
B. RM189,200
C. RM198,670
D. RM169,800
8. Given is the data for SeaMaster Enterprise’s budgeted sales of life jackets for January
and February 2012:
Month Budgeted sales units Price per unit
January 3000 units RM45 per unit
February 2% more than January RM50 per unit
All sales are in cash. What is the sales budget of SeaMaster for January and February?
A. January RM135,000 and February RM153,000
B. January RM153,000 and February RM135,000
C. January RM135,000 and February RM155,000
D. January RM155,000 and February RM135,000

3. BKAL1013 Tutorial 8 A121 2012
3
Questions 9 and 10 are based on the following information:
Zania Corporation is a merchandising company. Information pertaining to the company’s
sales revenues is as follows:
June
RM (Actual)
July
RM (Budgeted)
August
RM (Budgeted)
September
RM (Budgeted)
Cash Sales 80,000 100,000 60,000 70,000
Credit Sales 240,000 360,000 180,000 220,000
Total Sales 320,000 460,000 240,000 290,000
Zania’s management team estimates that:
Of the credit sales, 60% are collectible in the month of sales and the remainder is in the
following month.
Purchases of inventory are 50% of the next month’s total sales.
All purchases of inventory are on accounts which are paid in the month of the
purchase.
9. Zania Corporation’s budgeted cash collections in July are:
A. RM312,000
B. RM460,000
C. RM316,000
D. RM412,000
10. Zania Corporation’s budgeted cash payments in August are:
A. RM240,000
B. RM220,000
C. RM145,000
D. RM269,300
11. Operating budget includes all of the following EXCEPT:
A. purchase budget
B. sales budget
C. sales forecast budget
D. administrative budget

4. BKAL1013 Tutorial 8 A121 2012
4
Questions 12 and 13 are based on the following information:
MydinSdnBhd is a merchandising company. Data from company’s 2012 budgeted sales for
the third quarter of the year are as follows:
Month Budgeted Sales (RM)
July 80,000
August 90,000
September 70,000
Cost of goods sold equals to 65% of sales.
MydinSdnBhd maintains a monthly ending inventory at 80% of the cost of goods sold
for the following month.
Beginning inventory in July is RM50,000
The company is now preparing a Merchandise Purchase Budget.
12. What is the budgeted purchase for July?
A. RM63,050
B. RM65,650
C. RM48,800
D. RM75,050
13. What is the beginning inventory for September?
A. RM19,050
B. RM36,400
C. RM56,000
D. RM45,500
14. Which of the following are components of Financial Position Budget:
i. Cash budget
ii. Inventory budget
iii. Selling and administrative budget
iv. Capital expenditure budget
A. ii, iii and iv
B. i and iv
C. i and iii
D. iii and iv

5. BKAL1013 Tutorial 8 A121 2012
5
Questions 15 and 16 are based on the following information:
Duniawi Enterprise estimates to sell their new design shirts at RM20 each. Estimated sales
for November and December are as follows:
Month November December
Units of sales 2,000 units 3,200 units
Advertising expense is expected to be 7% from the sales amount
Other expenses are administrative expense of RM15,000 and depreciation expense of
RM8,000 per month
15. The estimated total selling and administrative expenses for November is:
A. RM25,800
B. RM23,224
C. RM25,000
D. RM28,500
16. The estimated selling expenses for December are:
A. RM12,242
B. RM23,224
C. RM27,480
D. RM4,480
17. The operating budget process usually ends with:
A. sales budget
B. selling and administrative budget
C. income statement budget
D. balance sheet budget
18. When preparing a projected income statement, which of the following budget is firstly
prepared?
A. Financial budget
B. Sales budget
C. Selling and administrative budget
D. Cost of goods sold budget

6. BKAL1013 Tutorial 8 A121 2012
6
Questions 19 and 20 are based on the following information:
Syarikat Pelangi estimates to sell their product at RM20 per unit. Its estimated sales
quantities for September to November 2011 are as follows:
September 1,500 units
October 2,000 units
November 2,500 units
December 3,800 units
Advertising expense is expected to be 5% from the following month sales while other
expenses are administrative expense RM25,000 and depreciation expense RM15,000 for each
month.
19. The total expected sales for the 3 months are:
A. RM120,000
B. RM196,000
C. RM6,000
D. RM9,800
20. The total selling and administrative expenses for October are:
A. RM42,500
B. RM42,000
C. RM41,500
D. RM43,800
21. Which of the following BEST describes some of the benefits related to the preparation
and use of budgets?
A. Business activities are better coordinate
B. Managers become aware of other managers’ plans
C. Employees may become cost conscious and try to conserve resources
D. All of the above
22. The budget that reflects in the effect of fluctuation in the level of activity into a various
budgets is known as:
A. static budget
B. flexible budget
C. operational budget
D. cash budget
23. Sahabat Company Bhd expects RM650,000 of credit sales in November and RM800,000
in December. Historically, a company collects 70% of its sales in the month of sales and

7. BKAL1013 Tutorial 8 A121 2012
7
30% in the following month. How much cash does Sahabat Company Bhd expect to
collect in December?
A. RM800,000
B. RM560,000
C. RM755,000
D. RM1,015,000
24. The estimated inventory at the beginning of the year is RM45,000, and the desired
inventory at the end of the year is RM60,000. The estimated cost of goods is
RM500,000. What is the total purchases indicated in the purchases budget?
A. RM485,000
B. RM515,000
C. RM560,000
D. RM605,000
25. The most effective budget figures are developed:
A. from the “top-down”
B. from the “bottom-up” following a participatory process
C. solely by the budget committee
D. all of the above
26. A calculator store purchased RM7,000 of calculator in September. The beginning
inventory for September are RM3,000, while at the end of September the inventory are
expected to be RM2,000. What is the budgeted cost of goods sold for the month of
September?
A. RM5,000
B. RM6,000
C. RM7,000
D. RM8,000
27. When preparing the cash budget, all of the following should be considered EXCEPT:
A. depreciation expense
B. cash payment to suppliers
C. total cash receipts
D. interest on financing
28. Abc Company reported the following information for a year 2011:
September October November
Budgeted sales RM620,000 RM580,000 RM720,000

8. BKAL1013 Tutorial 8 A121 2012
8
How much cash will Abc Company receive in November if all the sales are on credit and
the company policy for credit sales is 50% collected in the month of sales and the
balance is in the following month sales?
A. RM290,000
B. RM650,000
C. RM600,000
D. RM580,000
29. Which of the following budget is considered as the most important financial budget?
A. Sales forecast budget
B. Capital budget
C. Cash budget
D. Master budget
30. Which one of the following set of items are all necessary components of the master
budget?
A. sales budget, operating budgets, and historical budget
B. operating budgets, historical income statement, and budgeted balance sheet
C. operating budgets, financial budgets, and capital expenditure budget
D. prior sales reports, capital expenditures budget, and financial budget

9. BKAL1013 Tutorial 8 A121 2012
9
Matric no: ______________ Group: _________ Attendance list no: _____________
TUTORIAL _______
ANSWER:
1. 16.
2. 17.
3. 18.
4. 19.
5. 20.
6. 21.
7. 22.
8. 23.
9. 24.
10. 25.
11. 26.
12. 27.
13. 28.
14. 29.
15. 30.